A further strong rise in employment and tick down in the unemployment rate in January add to the sense the labour market is heating up, but earnings growth nevertheless eased back to 3.5%, from 4.0%. On paper, this lowers the odds of the Bank of Canada cutting interest rates again at its March meeting but, with tariffs still scheduled to take effect next month, we remain of the view the Bank will err on the dovish side of caution and reduce the policy rate by a further 25bp. Markets just about agree, pricing in a 55% chance of a cut next month instead of a pause, versus roughly 70% pre-data.
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